Short-term trend remains negative, but S&P 500 continues to close in on upper edge of 10-Day Price Channel (1654.62 through Thursday). Intermediate Cycle, as measured by lower edge of 10-Week Price Channel (1638.33 through September 6) is in jeopardy.

Daily MAAD was big news Wednesday in that indicator rallied to new high to eclipse previous high made August 14. Eighteen issues were higher with 2 lower. Daily MAAD Ratio was marginally “Overbought” at 1.29.

Daily CPFL, on flip side, was negative by 2.71 to 1, sank to new short-term lower, and was slightly below uptrend line stretching back to October 2011. Daily CPFL Ratio remains “Oversold” at .55.

Market Overview – What We Think:

Strength by Daily MAAD to new high Wednesday makes market environment more interesting considering fact NYSE a/d and NYSE up/down volume lines remain weak while continuing to hold well below August price highs that neither confirmed.

While MAAD includes NASDAQ Composite transactions, strength of indicator is not merely reflection of COMPX strength compared to SPX and Dow 30. Could be that MAAD is better measuring Smart Money tendencies, fact that market is in vicinity of yet another short-term low, and that new highs could follow.

Considering MAAD strength, extent to which any short-term advance plays out relative to August highs (1709.67—S&P 500) will determine staying power of larger Intermediate Cycle in effect since last November 16.

A number of things are weighing in favor of higher prices on Minor Cycle including failure of short-term Momentum to make new lows, “Oversold” price-based short-term oscillators, our VIX-based volatility indicator turning higher from near-term zone of opportunity, and bullishness in MAAD.

Negativity and new short-term low by CPFL is an outlier

Index

Price Channel Stops (10-Bar MAs of Highs/Lows )

Weekly

Monthly

9/2

9/3

9/4

9/5

9/6

9/6

9/30

S&P 500 Index

BUY1665.17

BUY1661.92

BUY1657.40

BUY1654.82

BUY1651.69

SELL1638.33

SELL1448.73

Dow Jones Industrials

BUY15085.99

BUY15044.12

BUY14999.46

BUY14974.28

BUY14944.36

BUY15451.27

SELL13465.21

NASDAQ Composite

BUY3647.50

BUY3644.06

BUY3637.62

BUY3637.80

BUY3635.26

SELL3485.26

SELL3044.23

Value Line Index

BUY3898.45

BUY3895.81

BUY3883.73

BUY3877.96

BUY3871.23

SELL3773.80

SELL3180.51

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.